Phoenix has closed $50 million CAD in equity and debt to help more men suffering from erectile dysfunction (ED) and other common but stigmatized health conditions “rise again.”
The Toronto-based healthtech startup—which offers a service for men across Canada to access treatment for ED, weight management, and hair loss virtually through its digital health platform—plans to use this capital to expand its team, increase the visibility of its brand, and scale its operations.
“I think Canadians really wanted to get care in this fashion, and it’s just been hockey-stick growth ever since.”
Gavin Thompson,
Phoenix
“I think we’ve really built a brand that resonates with men,” Phoenix co-founder and co-CEO Kevin Bache told BetaKit in an interview.
Phoenix’s Series A round closed in January. Boston’s Valspring Capital—a growth equity firm founded by the former healthcare investment team of Bain Capital Ventures—led the all-primary equity portion, which also saw participation from existing backer Y Combinator (YC), while CIBC Innovation Banking provided the venture debt component.
Bache claimed that the round was “mostly equity,” but declined to disclose the exact breakdown or Phoenix’s valuation. This capital brings Phoenix’s total funding to $55 million. Valspring managing partner Yumin Choi and senior principal Amanda Zajac are joining Phoenix’s board as part of the round.
Phoenix customers seeking access to treatments for ED, weight management, and hair loss complete detailed, asynchronous questionnaires, upload government identification, and pay $40 per online visit. That information is then sent to an independent licensed physician in their province, who ultimately decides whether or not to write them a prescription.
If approved, Phoenix sends that prescription to a licensed partner pharmacy and fulfills home delivery of the associated drugs as early as the next day, compensating doctors for their time whether or not they write prescriptions, and generating revenue from medication sales. Today, Phoenix is available across Canada, except in Québec and the territories.
Bache founded Phoenix in 2019 with co-CEO Gavin Thompson. They claim the startup acquired its first customers within two hours of launching.
“I think Canadians really wanted to get care in this fashion, and it’s just been hockey-stick growth ever since,” Thompson told BetaKit.
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The co-CEOs argued that the discretion and convenience Phoenix offers compared to the typical doctor’s office or pharmacy visit has aided the startup’s growth to date, but declined to disclose Phoenix’s current revenue or the size of its customer base.
“Out of the gate, the demand for their solution was clear,” Choi told BetaKit. “The team was able to address the incredible demand while keeping operating costs down, building and iterating quickly as needed.”
CIBC Innovation Banking executive director Niramay noted that Phoenix has achieved “impressive year-over-year growth, with revenues increasing multiple folds annually.”
“This growth trajectory reflects Phoenix’s effective operational strategies and targeted marketing efforts,” Niramay told BetaKit. “What’s even more impressive is that Kevin, Gavin, and their team have achieved this remarkable scale with disciplined execution and capital efficiency, proving the strength of their model.”
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Choi said that Valspring views Phoenix as a compelling investment opportunity given the size of Canada’s pharmaceutical market, its ongoing primary care physician shortages, and its cost advantages compared to the US in terms of operations and drug pricing. He sees Phoenix’s approach to marketing and operational discipline as a differentiator amid a competitive virtual pharmacy and delivery space that lacks a “dominant incumbent.”
Telehealth companies have been boosting advertising spending lately while also taking on more complex medicines. Meanwhile, online providers that help patients access GLP-1 receptor agonist drugs such as Ozempic, which have demonstrated efficacy for weight loss, have reportedly contributed towards a long-term shortage of them in Canada that has only recently eased. That is a concern for folks leaning on those drugs for their on-label use for treating diabetes.
According to Thompson and Bache, Phoenix’s specialization in certain conditions has been a key factor in its growth to date. They declined to say whether Phoenix intended to move into any new segments, noting that the company is “mostly focusing on doubling down” on what it is doing in existing markets with its Series A capital, as it looks to reach more men across Canada.
Thompson said the now 35-person company intends to “at least double, maybe triple” the size of its team this year to support its growth. Phoenix’s website also indicates that the startup is planning to move into servicing premature ejaculation.
Feature image courtesy Phoenix.